HH: I am joined in the first hour of today’s program by Dr. Thomas P.M. Barnett. He is the author of many books, most importantly thus far The Pentagon’s New Map, with which I did a long conversation series with him a couple of years ago, and a brand new book called Great Powers: America And The World After Bush. Now tonight, the President of the United States is going to address the country on what he sees ahead of us. I hope he’s read Great Powers. I know a number of members on his National Security Council staff almost certainly have. And we’re going to talk about the economy today, because I’ve been doing a week by week walk through Great Powers with Dr. Barnett. And this week, we are on the diplomatic realignment chapter, Chapter 5: The Diplomatic Realignment – Rebranding The Team Of Rivals. Dr. Barnett, welcome back to the program, good to have you.

TPMB: Thanks for having me on again.

HH: Just forecasting tonight a little bit, what do you want to hear the President say when he talks about the international economic crisis that’s felt so globally right now?

TPMB: Well, we’re stuck in this situation where we’ve had this economic relationship with the outside world that posited the United States as the reserve currency without any peer, and hence money was very cheap for us. And as we encourage the rise of economic powers in Asia through an over-importing of goods, and the implicit deal being that they would funnel their trade surpluses back into our debt markets, we’ve gone as far as we can on that. And yet, because of that structure that we’ve created over the last twenty, thirty years, there’s no question everybody’s telling us the same thing. They can’t start until the American consumer starts. So the stimulus package was necessary, we can argue about how well it was done, and what mix of tax breaks versus actual spending. But then the second thing has to signal right away, and I was glad to see them do it, actually, was to say once I’ve gotten the stimulus package up and running, and I’ve addressed the housing crisis, now I need to show the world I’m going to be serious about my debt in terms of reducing my federal deficit. And then beyond that, he has to start signaling that he’s looking to recalibrate the nature of our transactions with the outside world in terms of trade. Those are big, big things that are going to require, as I’ve said earlier, Asia to grow up pretty dramatically in terms of developing its own domestic markets, and for China to assume more monetary risk, which is a pretty scary concept for them.

HH: Now I have been reading Great Powers along with the audience for the last few weeks, and it makes me an optimist about the global system, or what you all the export of the American system globally. And because…and I don’t believe capitalism is dead, and I think this is a recession, it’s nasty and it’s bad, but that recessions end and trade resumes because it’s in our interest to do so. And as you point out, there are three billion new capitalists around the world who want to do nothing other than make money and do so by making more goods and selling them all over the place.

TPMB: Right.

HH: If we don’t go sideways…do you expect to hear in the President’s address tonight, do you want to hear a ringing endorsement of globalization and trade?

TPMB: I would. I don’t think I’ll get it from him. I’ll take, in this climate, anything that suggests that he’s not going to allow any slide towards protectionism. I mean, given the fact that all the great powers around the world are doing whatever they can within the WTO guidelines to protect themselves as much as possible, the worst thing being everybody kind of encouraging their banks to stay home and take care of themselves and take care of their own accountholders. And what that’s done is it’s reduced the flow of investment and to reduce the flow of foreign direct investments specifically to the point where they’re talking about it coming down to, the flow to developing markets, by as much as 4/5ths this year, and that would be a bad event as far as it unfolds. I think it’s going to unfold. I think it’s going to be a bad year. But whatever he says that suggests that we’re still open for business, we still want to do trade with the world, we’re eager to increase our exports, we’re not going to turn away anybody’s imports, we’re not going to resort to Buy American any more than possible in terms of the stimulus package, all those things would be good signs, because they say that we’re not abandoning the system that we did so much to create.

HH: I’m talking with Thomas P.M. Barnett, Dr. Barnett the author of Great Powers: America And The World After Bush, it’s linked at Hughhewitt.com, and we’re doing a little forecasting of what might be ahead in the sort of State of the Union address tonight by President Obama. But I also, I don’t expect much on diplomacy, but if he does talk diplomacy, Dr. Barnett, Chapter 5 in Great Powers is called The Diplomatic Realignment – Rebranding The Team Of Rivals. And it’s really the Russia, China and a little bit of Iran chapter. Brazil and India are in there a little bit, too, but it’s really the Russia-China chapter, and a little bit of Iran.

TPMB: Right.

HH: What do you want to hear him say tonight if it comes up at all about those three powers – Iran, Russia and China?

TPMB: Well, what I would expect him to say is that he wants to have a broadband relationship with China that’s not just about economics. That was the note that Hillary Clinton sounded on her trip, which I thought went pretty darned well in terms of establishing a new tone, or not so much a new tone because we didn’t have a bad tone with China under Bush, but one that suggests that we’re not going to be protectionistic with them, that we’re not going to let economics ruin the opportunity to do further cooperation with them, and that we’re not going to push human rights to the point where we might sabotage a highly interdependent financial relationship. I don’t think there’s a whole lot to say on Russia right now. Putin’s sucking wind because of the drop in oil prices, so-called axis of diesel, you know, Venezuela, Iran and Putin and Russia, all of them, much less powerful, much less bite to their bark now in terms of $40 dollars a barrel as opposed to $140 dollars. So I don’t think there’s much he needs to say about that. On Iran, I would expect him to say the typical thing, which is we can’t countenance any sort of achievement of nuclear weapons by Iran. He’s going to keep dangling the carrot of increased economic ties. But I don’t see that having a whole lot of impact in Iran in the run up to the election right now. And even if Khatami or Larijani won in Iran, and Ahmadinejad went down, and I think there’s a good chance he may because he certainly, his economic populism hasn’t worked any better than Chavez’ had in Venezuela. I don’t see the Iranians accepting a deal by which we can offer them enough economic connectivity that they will say to themselves we’re going to abandon, very openly abandon our pursuit of a nuclear device or capability, because even if you get a reformer in there, I think one of the quid pro quos that the supreme leader would demand for allowing a reformer to have an expansive campaign, make his case to the people, not be restricted by the clerics whatsoever, would be to signal some sort of commitment that yeah, if I become president and I do pursue warmer relations with the West in order to get economic connectivity, I will not surrender the nuclear capability, because I see that for them as being something they’re very committed to in terms of their national identify. And it’s their perception, which I argue is validated by history that there is a lot of safely in getting nuclear devices if you’re a power worried about invasion by other powers. And I don’t think we can do anything in the short term that’s going to dissuade them from that desire to have that ace in their hole.

HH: In the chapter on the diplomatic realignment – rebranding the team of rivals from Great Powers, you write on Page 219, “As Beijing did then,” meaning after the cultural revolution, “Tehran now shows the classic signs of a revolution that is completely spent, with no victories to show after decades of trying to export revolution, a tired authoritarian regime looking to end its isolation, consolidate its regional influence, and remove the threat of outside invasion, a population that’s overwhelmingly pro-American in orientation despite decades of indoctrination to the contrary.” And you point out it’s the one country in the region where political leaders are voted out of office peacefully, and not at the end of a gun. Now we can talk about the nature of the regime, I don’t want a debate, I want to get your position out there, which is do you really believe this regime is reformable?

TPMB: I believe this regime is co-optable in the same sense that I look at them much like a China around ’70-’71, you know, big talkers, trying to revive revolutionary spirit among a youth for whom it really doesn’t find much purchase. Their economy is in shambles, classic signs of a death spiral for any civilization is you export your women, and you either export or deny your babies. They have a huge brain drain going on right now. There’s a birth dearth that’s really quite stunning. People are not having kids, okay? And the hot, new prostitute in Europe, by all accounts, is the Iranian escapee. So when you see that, you see the money leaving that country, you see the businessmen leaving that country and moving their assets and what not across the Gulf into the UAE and the other emirates. You’re seeing a place that’s not betting on itself at all. I mean, they really aren’t exhibiting much optimism about the future. And the more they try to squeeze that population in terms of reviving revolutionary spirit, I mean, they become less and less successful with it. The classic problem of making religion state sponsored is that it usually kills the religion. And the example set by Sistani with his quietism across the border in Iraq is actually a fairly dangerous one for the, because Sistani’s whole mode of operation in terms of religious leadership is to say you preserve religion by keeping it out of government hands. And he looks at the Iranian experiment, by and large, as being a pretty profound failure. So I look at them as, you know, I don’t want to make the fight over the nuclear devices, because I don’t think that’s something I can’t handle, quite frankly, and I’m not impressed by the arguments that say they’re crazy. I don’t like to conflate behavior from the radical Salafi jihadist movement into Iran. I think Iran has a good sense of its future and has some optimism about one man, one vote in the Middle East where the Shia are half the population.

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HH: Before we move on, Dr. Barnett, to the core principles of the chapter on the diplomatic realignment, I do want to ask you, yesterday I had on Michael Ledeen of Foundation For the Defense of Democracies, one of the great deniers of the possibility of reform within Iran, you are a believer in the possibility of reform within Iran. What about the 12th Imamists and Mullah Yazdi, not Ahmadinejad, we know he may be voted out, but there is a fanatical element there that’s not crazy, it’s just that they’re fanatical. What kind of destabilizing influence do you think they have?

TPMB: Well, it all comes down to the supreme leader, who hasn’t indicated any sort of irrationality along those lines. This is a country that really, like most revolutionary regimes in my mind, has one overriding goal, and that is to maintain its grip on power. And I think when we cloud the issue with the behavior of extremist elements, or we get yanked in terms of our chain by Ahmadinejad and propaganda, and statements he likes to make that he knows will inflame our perspective dramatically, I think that’s not helpful. I think they are at the end of a revolutionary process, they’re very interested in maintaining control. We need to show them, much like we did with the Soviets, that we in effect respect their control, but that we need to find some capacity for them to rejoin the world economically, and do the same thing to them that we talked about Nixon doing to the Soviet Union. We need to infect, in effect, their overwhelmingly young population with a consumeristic ability to tap in their consumeristic desires. And I think if you get that kind of broadband economic connectivity, they’re going to have a much harder time ruling over their own populace, which is overwhelmingly talented, educated, quite literate, quite ambitious, and really desperately unhappy given all the signs we see coming out of it. So I don’t like to get too wrapped around the axel about particular players in the regime, or what they’re advocating.

HH: How does Great Powers play in Israel? You know, we’ve got a new government forming there, Netanyahu’s coming in, hopefully broad-based with Kadima and Labor alongside. But it’ll narrow, one way or the other, Netanyahu’s going to be the guy who decided whether or not to strike Iran. How does Great Powers play there if at all? And if you had your ten minutes with Netanyahu, what would you argue to him?

TPMB: Well, I would argue, and what I think they already know because I’ve seen a lot of these arguments coming out of Israel, I’ve had these conversations with people from there, they pretty much know they can’t really take out the Iranian capacity. They can delay it, they think if they strike at a certain time and go after certain bodies, which may include assassinations, they can inflict some harm on it. But they know they really can’t make it happen in terms of really wiping out the capability. They know that. There is fear about Ahmadinejad, and what he may do with it. I think some of that fear is a little bit misplaced because again, he doesn’t control the military, and he doesn’t control the nuclear program, he’s actually by their definition, the position is rather weak. He’s tried to consolidate a certain amount of power there, and I think they’re concerned that if he stays in power, further consolidation around his office may occur. So the election is pretty seminal. I don’t think they’re going to strike beforehand. But if he was to be re-elected, and wasn’t conciliatory or at least open and kind of ratcheted up the rhetoric at that point, then I think they’ve probably make the effort thinking that it would buy them a couple of years. I don’t disagree with that. I just don’t think it’s going to get them what they ultimately want down the road. And they’re going to get more backwash in terms of Iranian support and demands that Hezbollah, Hamas do things to Israel to make their lives more difficult.

HH: All right, interesting years ahead. Let’s get to the bigger argument in the diplomatic realignment, because it’s very provocative, and I want to put it in a nutshell. Basically, we’ve got to take Russia and China, and take them from being our adversaries and turn them into our partners, that they have to join, obviously as Doris Kearns Goodwin popularized the phrase, the team of rivals with her book on Lincoln’s cabinet. But you’re arguing we just need to rebrand Russia and China and turn them into our strategic allies, or at least our strategic partners. Expand on the basic premise for the chapter for the audience.

TPMB: Well, you’ve got to think about globalization as a series of successful replications with the first version really starting in Europe in the 17th and 18th Centuries. They tried to replicate very cynically, in terms of colonial relations, they don’t actually replicate their system, they just co-opt local elites and have very unfair transfer of wealth in that process, so a very corrupt system. They do that in Africa, Latin America, East Asia and the Middle East. The only place they’re really successful in replicating in the kind of British and Dutch system is in that green field operations, North America, and then to a lesser extent, Australia and New Zealand where much fewer people go. We’re smart enough to break off from that system. After the colonial system self-destructs in the first half of the 20th Century, where are we successful in replicating? It’s in Asia the last thirty, forty, fifty years. So if you look at it like that, and you think about every time there’s a replication process, the initiator moves up the production chain. So it starts with Europe, they move up, we become the big manufacturer of the 20th Century like they were in the 19th Century. Collectively, the Europeans and us both move up in the 21st Century, and you get in effect Asia becoming the manufacturing center of gravity in the system. As that system continues to advance, where does Asia go to replicate itself? Where does it locate markets that it can in effect dominate in the same way that we had a very strong relationship with Asia last thirty, forty years? I think they look at the world and they see two big untapped labor pools. They see some in Central Asia, they see a big bunch in Africa, they see a certain amount in the Middle East, they don’t really want to go there, they see it simply as a place to get energy. So I think the decision’s already been made in terms of India and China’s grand strategies. Where they’re going to make their economic networks proliferate is going to be in sub-Saharan Africa, because they find sub-Saharan Africa not that odd of a place to look at. An American businessman goes there and he sees bad soil, bad climate, bad governments, bad infrastructure. And the average Indian or Chinese businessman goes there and looks around and says man, this looks just like home. I’m going to make a ton of money, because I know how to make this thing work. So if you think of it along those lines, everybody moves up the chain over time, and Asia, because of its aging demographics, has to move up fairly rapidly, China’s going to get fairly old, fairly fast.

HH: Explain that for a second.

TPMB: Well, the one child policy really triggered this kind of perfect moment for them where they have few kids because they’ve suppressed birth, and they have few old people. So just about everybody in their system is working, which is the demographic sweet spot. You really have to become a major manufacturer to take advantage of that, because what happens is as you depress the birthrate, that depression works its way through the system, and your country ages. Now China’s going to go from about 10% over age 65 to 20%, the so-called Florida mark, okay?

HH: Yeah.

TPMB: They’re going to do that in about twenty years. The United States is going to hit that 20% mark around the same time China does in the early 2030s, but our journey from 10 to 20%, about six decades. Europe and Japan had a century to make that journey, they weren’t ready. I’ll argue we’ll probably not be that ready by 2030, ’35. I guarantee you China will have nowhere near the social security networks, the pension systems, the medical care to manage that flow. So they’re really incentivized to not just make good money on what they can manufacture now but to replicate their markets elsewhere so they can push off the lesser industries, and move up the chain.

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HH: One of which is, I’ll call it the ‘don’t worry, be happy’ approach about China and Russia, Dr. Barnett, because as you point out, we can no more keep China out of the Middle East than we can keep rain from falling, because they need as much oil, they’re the third largest oil importer in the world, you write. Their car population’s going to increase tenfold in twenty years. They’re just going to have to be there, and we’d better get used to it.

TPMB: Well and you know, right now, we only take out one of every ten barrels that the Persian Gulf pushes out to the world, whereas Asia takes about five. And they’re going to go up to six or more, and we’re going to really still be about one out of every ten barrels in twenty years. So if you’re look at it from their perspective, I mean, we’re the ones that have the huge Navy, we’re the ones that are transforming local regimes by toppling dictators and trying to make different situations come about. Compared to them, we have done a tremendous amount of interventions in the Middle East, and we don’t really have the same economic interests that they have. So when they move in the direction of stringing this string of pearls basis, as it’s been described by the Pentagon, between themselves and the Middle East, I don’t see that as being odd. I actually welcome their movement towards the Middle East, because I need more help, I can see it just on the Somali pirates, than I can muster among my Western allies. And I need to tap into the countries who have expanding economic interests. I mean, I make a basic argument in this chapter, if you’re demographically moribund, you’re not having babies, okay? Your military is shrinking, your defense budget is shrinking, you haven’t gone anywhere and really killed anybody in decades. I mean, you’re probably not going to be my best ally in a vast period, next two of three decades, of frontier integration activities, you know, that kind of stuff we did in the American West 1865-1900. But if you do have plenty of babies, and that’s less so Russia, more so Indian and China, you do have expanding economic interests, your defense budgets are rising, and you’re trying to match your political and military ability to defend what is a vastly larger economic and network connectivity with the world. Then I say you’re looking like an America 1880-1890, and I should naturally mentor you into my system, because it takes bodies and bucks to do this kind of dealing with failed regimes and states that are going to be remapped by globalization’s penetration, and are going to have a certain amount of tumult. So when I see Indians all over Africa, I see Chinese all over Africa, I see the biggest supplier of missionaries, Christian missionaries in the world, South Korea, okay, then I’m looking at Asia, and I’m saying these guys are the natural frontier integrators of the age. We’ve got to get off this thing that says the only friends I have are Europeans, because quite frankly, they’ve been there, they’ve done that, they got the T-shirt a hundred years ago, and they ain’t going back.

HH: Now I also want to talk about, this is more next week’s conversation when we get to Chapter 6 on the security realignment, but it is part of this Chapter 5. You point out since 1997, we’ve been producing annually at the Pentagon a book called Selected Military Capabilities of the People’s Republic of China. And you argue that this is really our leading indicator of who we consider to be our biggest threat in the world. We used to do it with the Soviet Union, they’re gone, now we do it with China, and it’s the big Army’s way, and the big military’s way of saying here’s our near-peer competitor, and here’s what we have to worry about.

TPMB: It’s a habit.

HH: You want us to break that mindset.

TPMB: Well you know, again, I’m looking who are naturally going to be people that are going to be out there willing to defend their economic interests. And the Europeans have by and large written off Africa. We can’t get NATO to really get involved down there in any sort of numbers, increasingly because they’re the major spreaders of globalization while I keep telling the Asians, and I wrote a piece for Indian Express this, New Delhi Express this week on the same subject, is that the assumption that globalization equals westernization equals Americanization, therefore the Americans are going to show up and defend their economic interests all the time, that’s going to be superseded dramatically. It’s already happening in Africa by this realization that globalization is largely Asian-driven, okay? So it’s going to be India and China more and more that are going to be held responsible for globalization’s expansive growth. And they’re the ones who get targeted more and more in terms of their assets and their people. We’re already seeing this with China starting to have oil rig workers killed in various parts of Africa. And what can they do about it? They can’t do anything about it, because they don’t have a military footprint that corresponds to that, and I don’t necessarily want a system down the road where I’m doing security for all these rising powers while simultaneously holding them off as near-peer competitors, because then I’m tapped out in terms of my resources, plus I’m not getting them off their myopic mindset, strategically, where India only thinks of Kashmir, and China only thinks of Taiwan, get them more interested in helping me in these situations.

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HH: Dr. Barnett, I want to talk about Russia. That may or may not be in the speech tonight. I am curious, what do the Russians think of your view of the world, and I’ll phrase it this way, I’m quoting from Chapter 5, “I’m hard-pressed,” meaning Dr. Thomas Barnett is hard-pressed, “To describe a better Russia for our grand strategic purposes right now, a brutally ambitious builder of economic empire that’s willing to crush obstacles in its path, I mean, haven’t we long complained that none of our allies want to go anywhere and kill anybody?” They must, they must love your book.

TPMB: Well, you know, where they are in terms of their thinking, and I like to compare them to the Godfather crew, I mean, for them, it’s strictly business. It’s nothing personal. So when Putin goes into Georgia, I mean, his basic response, he had a very telling press conference, went on for about three hours, it was several weeks after the event, where he basically said you know, I don’t get this. I thought this was what great powers do, you know? I thought if they didn’t like a regime, they demonized it, they said the leadership was evil and needed to be removed. And if they so desired, they went in with their military forces, tried to shake things up, and yeah, if there’s an energy play involved in that, so much the better. And so my wife always says when my 13 year old son behaves badly, where the heck to you think he gets it, you know, it’s modeled behavior. So they look at us and they say hey, you did your thing in Afghanistan, we got that part, you did your thing in Iraq, we didn’t exactly get that part, but we saw what we thought was an energy play there, okay? And so if we do the same thing in our neighborhood, isn’t this how great powers behave? So we have a problem, a little bit, with model behavior and some of the bluster we get when oil’s at $140 dollars a barrel. I think they’ve gotten a certain blowback in terms of financial repercussions, and a sense that that was inappropriate behavior. They didn’t make the effort, for example, with the UN to kind of get enough buy in so that at least their efforts in Georgia, you know, which were very self-aggrandizing, let’s be real honest, this is a lot of personal enmity between Putin and Saakashvili, and there is very definitely a desire on the part of the Russians to dominate oil pipelines in that neck of the woods. And if you look at it from their perspective, okay, I’m going to be a cynical realist here, they gave up Eastern Europe, all of it. They gave up the Baltics, okay? And when it got to the mother Russia, the old Soviet Union, you’re talking Ukraine and Belarus and Georgia, I mean, that just got way, too close for their comfort. And I think what you’re seeing is, you’re seeing the point where they’re not going to allow NATO and the EU to shift eastward anymore. And quite frankly, I don’t think there’s a lot of good argument for NATO and the EU to shift that much eastward. I’d rather see them shift southward, wrap around the Mediterranean and start focusing on the long haul over on a Mediterranean-focused union, because I think that deals with a lot of the issues in terms of the aging demographics and the immigration, and a lot of the other stuff the Europeans have to deal with anyway. Otherwise, they’re just going to end up restarting problems with Russia. And when you talk about Russia and you say well, what are we going to put up with in terms of the Caucuses, the problem there is that nobody else is really willing to step up and kind of own the Caucuses. It’s too far from China, Turkey and Iran have some ambitions, not that much, we don’t have a whole lot of ambition there, and neither do the Europeans. So unless you’re willing to own this problem, you’re going to have to consider it in a kind of cynical, realist way. There’s going to be more Russia’s front yard than anybody else’s, and you’re going to have to understand how they deal with that part of the world, we’re going to have to contest it as much as possible if we don’t like what they’re doing, but this is going to be in effect our teachable moment with the Russians.

HH: Now Thomas Barnett, though, the most infamous of all of Bush’s statements has got to be the one where he said I looked into Putin’s eyes, and it’s a man with whom I can do business, the man I can trust. I can’t remember, I’m paraphrasing it, and of course that proved to be not true, and Bush got slammed for it again and again and again. But reflecting generally an American suspicion of Russia which is just very deep, I think I would argue much deeper than our suspicion of China is…

TPMB: Oh, yeah.

HH: Ought we to overcome that? Is that what you’re arguing, just get on with it?

TPMB: Yeah, let’s just trust the Russians to be Russians. I mean, they’re at a point in their history where all they’re interested in is making a buck and reasserting their power through economic assets that they have in abundance – oil and gas. So I mean, if they get any sense that we’re trying to do an end around in terms of accessing Central Asia in oil and gas, and not allowing them some sort of control capacity in terms of the pipelines that ensue, I mean, I expect them to come back like a Microsoft responding to Oracle or Google. I expect them to be brutal and very, very desirous of defending their economic interests. I would actually welcome a China and India that was more like that, okay, because I don’t see a whole lot of ideology there. I don’t see any desire to own stuff or expand their actual political ownership in terms of ground coverage. But I do see a really strong sense that there’s a desire to protect their economic interests. Yeah, I want to shape that behavior in terms of how they do it, I want them to grow up a little bit and not be so crude and 19th Century, but I don’t want to turn them away and demonize them, because quite frankly, I need that kind of stuff.

HH: Do we care, I have a friend, a colleague at Chapman Law School, John Bell, just wrote a piece for the Journal, Europe edition, about the number of journalists that have been assassinated in Moscow, and it’s a very dangerous thing to be working for a non-government press entity in Moscow these days. Do you think we should care about that, Dr. Barnett?

TPMB: Well you know, I think we should care about it, we should push it as much as we can. I don’t think it should be the center of our policies with them. I mean, they are stuck in a scary kind of 1920s-Al Caponish situation, and I don’t expect that to go away anytime soon, until they achieve a certain level of income development, and they get a certain level of confidence. They are doing whatever they consider to be necessary to advance their security interests, and they see that in a very Russian sort of way, which is state dominance, state guiding of capitalism. And I’m happy enough to have them in this neck of the woods in terms of their internal evolution. I mean, we’re complaining about them being too much a state-directed capitalism. I emphasize the capitalism, I’m less concerned about the state-directed, because they can only go so far with that, and they can only develop so much on the basis of oil and gas.